Why does Denoising take up so much memory?
Like Cegaton said, it uses the other tiles in the memory. Using that logic, I ran a test, and found that if you reduce the tile size (in the performance pulldown) the image renders using much less. My file was usually around 1.3GB when rendering, but as soon as the denoise kicked in, it shot to 9GB, but I reduced tile size from 512 to 256, and now, the entire image rendered with denoising maxing at only 1.7GB.

So if it crashes, just remember that you can reduce the tilesize, and you should be fine.